Retail block with room to grow

10:10 AM Saturday October 4, 2014Colin Taylor

The Hillary Square site currently has eight retail tenants.

A high-profile retail building for sale north of Auckland in the middle of Orewa's central shopping area has the potential to be developed up to eight stories under the council's Proposed Unitary Plan.

The 596sq m single-storey building on 956sq m of land at 4 Hillary Square is featured in Bayleys' Total Property portfolio and is leased to eight retail tenants who pay an annual rent of $267,104.

"Its position, tenant mix and potential for development make it a strong investment property," says Bayleys North Shore sales agent Daryl Devereux, who is marketing it with colleague Brian Caldwell through a tender process closing on October 23.

"The Proposed Unitary Plan also allows development of up to five storeys for most of Orewa to the north and south of the town centre, between Hibiscus Coast Highway and Centreway Rd," Devereux says.

He says the property occupies a corner location with frontage to Hillary Square - a prime location in one of Orewa's key retail precincts.

"The area is anchored by two supermarkets, with the New World to be extended and modernised next door. There are also a number of banks, along with diverse shops and services in the area.

"The strength of this investment is the diversity of the eight tenancies, which include hospitality, giftware, pet, technology and clothing. This is further supported by the high-quality shops, cafes and restaurants in the surrounding area."

Six of the eight tenancies face Hillary Square and the remaining two have access and exposure to the New World car park.

"Zoning changes under the Proposed Auckland Unitary Plan would allow for a wide range of activities into the area including commercial, leisure, residential, tourist, cultural, community and civic services," Devereux says. "In addition, it would allow a range of building heights in the Orewa town centre of up to eight storeys, dependent on context.

"This translates to huge development potential for the site, with the increased height allowances facilitating additional office and residential living opportunities on the top floors."

Devereux says the sites for intensification are located close to transport links and the proposed plan replicates what has been proposed for Milford and Birkenhead on Auckland's North Shore.

"In Milford, the New Zealand Retail Property Group increased the height restrictions above existing retail spaces, which allows the development of residential accommodation and commercial spaces.

"The surrounding demographic is retirees and, more recently, a younger population, particularly since the development of nearby high-rise apartment Nautilus and the surrounding Millwater residential development."

The property at 4 Hillary Square was constructed in two stages - the original building in 1972 and an extension built in 1987. The tenancies are all a rectangular shape, ranging in size from 40sq m to 149sq m.

Tenancies range in lease terms from two to 10 years, some with rights of renewal. Construction is of reinforced concrete foundations, timber and steel frames and a steel roof.

Caldwell says a new owner will take over a property filled with diverse tenancies. "These will continue to give a healthy existing return while the purchaser contemplates exciting growth options for the future."